Evolution Of Currency
Currency history shows currency beginning as a way of determining the value of goods or services, a process that involved trading something valuable after calculating the value of the goods or services received.
This form of currency used to determine the worth of a product or service can be noted with the earliest currency history as far back as Egyptian society, where a set amount of food was exchanged for a shipment of goods.
The next major development in currency history was the use of metal to indicate value. Metal objects were considered very valuable and were used as currency in the Middle East, a practice which spread across Asia into the Mediterranean countries. However, metal was not the only form of currency; other societies used items that they valued as forms of currency that could be traded. Currency came in the forms of gems, animal parts, cloth, etc.
The development of a currency system based on coins began in Greece with the implementation of a unified value system that was based on the weight of silver and gold coins. These coins were standardized based on their weight, which made it possible to create a system of currency in which the value of a thing could be measured and applied to all things of the same category. The next major development in currency history was the introduction of paper money, which began in China. The Chinese began to use paper notes to represent large amounts of coinage in order to simplify transactions. Eventually, the government became the exclusive producer of paper notes, standardizing their value as the Greeks had standardized the value of their metal coins. The use of paper money in Europe took place almost 300 years after it was standardized in China, but was a significant era in the timeline of currency history. As was the case in China, paper money was accepted as currency in Europe due to its ability to represent large amounts of coins. Yet may societies had no limitation on the production of paper money; almost anyone could make their own. There was an obvious need to limit the ability to produce paper currency in order to ensure that the notes issued matched the actual amount of gold or coins in existence. Thus, legal tender was created to solve the problem of covering paper notes. Legal tender was currency issued in the form of paper which represented an existing amount of gold, and only the government could issue it. Legal tender evolved over the 18th and 19th centuries, forming the basis of recent currency history. Today legal tender is part of our currency history as it comes in the form of paper money and coins which have been issued exclusively by the government. These forms of currency were originally based on a gold standard - the note or coin equaled a set amount of gold. Many countries still base their values of currency on this gold standard; however, the United States began using a "fiat standard" in which paper money is not backed by gold.
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